Private businesses added more jobs than expected in July, according to a report released Wednesday, but similarly strong figures last month raised hopes that were dashed when the government's official data were released.
Private-sector jobs in the U.S. rose by a modest 114,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.
Economists surveyed by Dow Jones Newswires had expected ADP would report a gain of 105,000 for July. The June data were revised to show a rise of 145,000 versus the 157,000 first reported on July 7.
The strong June ADP jobs number had caused investors and economists to hope the U.S. labour markets had turned the corner toward stronger hiring. Stocks rose on the news, and many forecasters lifted their nonfarm-payrolls forecast after the release of the June number.
Instead, the U.S. Labor Department on July 8 said only 18,000 new jobs were added in June and the unemployment rate increased to 9.2% from 9.1%.
The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm-payroll data, to be released Friday, include government workers.
Economists surveyed by Dow Jones Newswires expect total nonfarm payrolls rose by only 75,000 in July, with layoffs expected in the state- and local-government sectors. The July unemployment rate is expected to remain at 9.2%.
The latest ADP report showed businesses with 500 or more employees added 9,000 new employees in July, while medium-size businesses added 47,000 workers and small businesses, with fewer than 50 employees, hired 58,000 new workers.
Service-sector jobs increased by 121,000 in July, but factory jobs fell by 1,000.
ADP, of Roseland, N.J., says it processes payments of one in six U.S. workers, while St,. Louis-based Macroeconomic Advisers is an economic-consulting firm.
Other job-related news released Wednesday was mixed.
Layoffs jumped in July, according to Challenger Gray & Christmas. The outplacement firm said an unexpected burst in private-sector downsizing pushed the number of announced job cuts to a 16-month high of 66,414 in July, 60% above the June number and the highest number since March 2010.
The report said the July job-cut surge was dominated by a handful of private-sector employers, including Merck & Co., Borders Group Inc., Cisco Systems Inc., Lockheed Martin Corp. and Boston Scientific Corp. The job cuts from these five companies accounted for 57% of the July total.
On a more positive note, TrimTabs Investment Research estimated the that economy added 161,000 jobs in July, up from 128,000 estimated in June.
